Understanding the Importance of Trade Balance in Goods and Services

The video explains the concept of trade balance, highlighting its role as an indicator of a country's competitiveness in global markets. It discusses how exports and imports affect a country's trade account, with exports bringing foreign money in and imports causing an outflow. The video also covers the implications of trade deficits and surpluses on aggregate demand, noting that a deficit can lead to a decrease in demand, while a surplus can increase it. The importance of considering both price and non-price factors in determining competitiveness is emphasized.

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